Correlation Between Lotte Non and Playgram
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Playgram at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lotte Non and Playgram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Non Life Insurance and Playgram Co, you can compare the effects of market volatilities on Lotte Non and Playgram and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lotte Non with a short position of Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Playgram.
Diversification Opportunities for Lotte Non and Playgram
Very weak diversification
The 3 months correlation between Lotte and Playgram is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and Lotte Non is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lotte Non Life Insurance are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of Lotte Non i.e., Lotte Non and Playgram go up and down completely randomly.
Pair Corralation between Lotte Non and Playgram
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Playgram. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 1.94 times less risky than Playgram. The stock trades about -0.08 of its potential returns per unit of risk. The Playgram Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 62,900 in Playgram Co on August 30, 2024 and sell it today you would lose (27,700) from holding Playgram Co or give up 44.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Playgram Co
Performance |
| Timeline |
| Lotte Non Life |
| Playgram |
Lotte Non and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Playgram
The main advantage of trading using opposite Lotte Non and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Playgram can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Playgram will offset losses from the drop in Playgram's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| Playgram vs. Pureun Mutual Savings | Playgram vs. Shinhan Financial Group | Playgram vs. Yura Tech Co | Playgram vs. Intellian Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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